News

New Hampshire considering a cap on card fees

January 27, 2012

The New Hampshire legislature is debating a bill that would limit credit and debit card fees to 1 percent for state-charted banks, according to a report by New Hampshire Business News.

State representative John Hikel (R) is sponsor of the bill. Hikel also is the owner of an auto repair shop. He said his fees vary from 0.65 percent to 4.76 percent and he only finds out the amount when he gets his credit card statement.

Federal law already limits interchange fees to 21 cents plus four basis points. However this rule only applies to banks with $10 billion in assets. In New Hampshire this includes Bank of America, TD Bank, Citizens Bank and Sovereign Bank. Eighteen state-charted banks operate in New Hampshire, as well as six smaller federally chartered banks.

If the bill passes, there will be three sets of rules: a federal cap for large national banks, a state cap for small state-chartered banks, and no cap at all for smaller federally chartered banks.

New Hampshire Bankers Association President Christiana Thornton, who opposed the bill, said a price cap wouldn't cover costs for smaller banks and would "make it entirely likely that some smaller institutions will need to discontinue issuing debit and credit cards, just to avoid losses in this area." Consumers would then move to banks that offered those services, hurting the state's community banks, she said.